Nifty Option strategy:
In last two months the implied as well as realised volatility of Nifty has fallen alot.
This leads to attractive long volatility strategies like straddle.
Trade idea: Buy 5400-Nifty April Call and Buy 5400-Nifty Put. The total option premium for the trade is arround Rs. 150 (Rs. 60 + Rs. 90)
The breakeven for the trade would be nifty ending lower than 5250 or higher than 5550.
The implied volatility for both trades is arround 14% p.a. and 13.6% p.a. These levels of implied volatility look very attractive since just few months back the levels were above 30%.
Techically nifty closed today at 5366 after remaining sticky at the resistance level of 5360. Month end view of Nifty would be atleast +-200 points, inline with the long volatility trade.
1 comments:
The topic is familiar but the content is very fresh and easier to understand. It has helped the readers to reduce the fear of investing and thereby losing money in the share market.
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